University of Rhode Island Economics Professor Leonard Lardaro, who tracks the strength of the state’s economy through his Current Conditions Index, continues to see ominous signs. Economic indicators such as layoffs, job loss and weak labor demand continue to worsen, he said, as the recession enters its eighth month. Lardaro suggests that the recession may last longer than some think, though he does see an economic rebound on the horizon. By Emilio DiSpirito IV License Partner | Engel & Völkers Oceanside Leader | The DiSpirito… “We are going to be going sideways for longer than people want us to,” he said. “We are in a deep recession. It’s not what a lot of people seem to think. It’s not a minor inconvenience.” According to Lardaro, miscellaneous service employment has been the only one of a dozen such indicators to consistently improve over that period. Lardaro uses 12 economic indicators in measuring the strength of the local economy. They are: government; consumer confidence; single-unit housing permits; retail sales; help wanted advertisements; miscellaneous service employment; man-hours manufacturing; manufacturing wages; labor force; benefit exhaustions; new claims; and the unemployment rate. Lardaro’s latest CCI — reflecting numbers through October 2001 — contains both good news and bad news. On the positive side, single-unit housing permits rose by a modest 0.2 percent in October, representing its fifth increase in the past six months. Construction employment rose sharply during the period, at an 8.5 percent annual rate. Retail sales also scored high, rising by 10.2 percent in October. Lardaro’s CCI contains bad news aplenty. Layoffs, job loss and weak labor demand continue to worsen. In October, new claims for unemployment insurance rose at 27.1 percent compared to last October. Help wanted advertising, an indicator of labor demand, fell by 35 percent. This indicator, said Lardaro, has now fallen at double-digit rates for each of the past ten months. Benefit exhaustions, a measure of the flow of people into long-term unemployment, rose by 37.3 percent in October, doubling September’s rate of growth. And manufacturing man-hours fell at a 6.3 percent annual rate, their highest rate of decline since June of 1999, while the manufacturing wage remained unchanged. Lardaro sees January 2002 as presenting another dose of reality – a difficult reality – for consumers. For example, he said, zero-interest rates will disappear. Unemployment, he said, will also rise. “We’re at about 4.6 percent unemployment now,” said Lardaro. “That is going to get higher and it is going to last awhile.”
Rhode Island's Market Has Changed. Developers, Builders, Investors and Sellers Must Change With It.
URI professor sees state’s economy still struggling
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